Navigating the modular shift:

Insights from real estate developers in the Netherlands

More Info


The productivity and sustainability issues in the construction industry are leading to the consideration of systemic innovations such as modular construction. The industry's complex and fragmented structure resulting in an established practice of aligning knowledge with specific tasks impedes the adoption of such innovations. This phenomenon, known as the 'mirroring trap,' obstructs businesses from identifying opportunities for adjusting their limits or restructuring their sector. Recent studies primarily examine integration strategies that facilitate the breakout from this trap. However, these studies predominantly emphasize the involvement of the main contractor and architect, while there is a noticeable lack of research on the role of real estate developers in this context. This lack of attention to real estate developers is unexpected, given their significant role in housing development within the Netherlands. The research aims to investigate how real estate developers integrate modular construction in their business. The research methodology employs a balanced approach as an iterative process between literature and empirical research. Six organisation structures were analysed with eleven expert interviews– Decentralized modular cluster; Collaborative modular clusters; Virtual project-based companies; Spin-off factory; Core-periphery platform; Integrated hierarchical firms. This thesis presents three approaches for integrating modular construction; 1) Project-based strategies incorporate modular construction via supply chain integration or through formal supplier networks, 2) Hybrid-based strategies blend industrialized construction techniques with a flexible, project-centric organizational structure via Integrated Project Delivery (IPD) and 3) product-based strategies concentrate on strategically breaking mirrors to achieve integrated organizational structures. Integration mechanisms, drivers, and challenges are identified for each. The strategies show that real estate developers play a crucial role in the integration of modular construction, and understanding the wide spectrum of strategies and tailoring them to specific contexts of the company can lead to more successful integration of modular construction. The thesis concludes with a discourse on how pinpointing and detailing integration strategies for strategic partial mirroring or breaking the mirror enhance the comprehension of integration in modular construction. It highlights the industrialization of construction development as a recurring theme and includes the current business structure's constraints. Moreover, it provides seven pragmatic suggestions for property developers to ponder over when assimilating modular construction.